Nate Silver Poker Tips
When elections don’t go exactly as expected, everyone is quick to point fingers at pollsters for getting it wrong. And no one takes more heat than FiveThirtyEight founder Nate Silver. Silver, a former management consultant and professional poker player, got into the political-forecasting business in 2007, after growing frustrated by coverage of the Democratic primary on cable news.
Nate Silver is famous for the accuracy of his predictions of US election results. His book The Signal and the Noise addresses prediction methods across a very wide front to develop his core arguments: that forecasts should be probalistic (i.e. forecasting that there was a 91% probability of Obama winning last year’s election rather than just predicting he would win); that Bayesian forecasting (i.e. reassessing prior probabilities on the basis of new evidence) is more accurate than frequentist approaches; and that in many cases the risk of rare but significant events (e.g. earthquales and terrorist attacks) can be modelled using a power law (i.e. log of frequency of earthquakes above a certain strength is inversely correlated with earthquake strength). To get these points across, Silver peregrinates on a journey across the forecasting of elections, baseball, terrorism, epidemics, share prices, earthquakes, weather, poker, climate change and chess. This is a long expedition through very varied terrain, and describing it takes Silver 454 pages; this book is not called “A Short Introduction to Prediction” for a good reason. And as on a round-the-world cruise, some of the points of call turn out to to be more interesting than others. Throughout Silver writes clearly and all of the chapters are very well supported by citations, but Silver is most insightful and persuasive in the domains in which he is most experienced (baseball, poker and US elections) and less persuasive in areas where his experience is weaker and the issues around forecasting are very complex (financial markets and climate change). The chapter on baseball assumes a knowledge of the game that is way beyond me, and I would guess most European readers, but perversely Silver explains the rules of Texas Hold’em in enough detail for a complete beginner to put down the book, head to the poker tables and lose (Silver includes an oblique reference to Joy Division, so he is not afraid of looking obscure).
The book includes a short but clear description of Bayes Theory, but as a book on a quantitative subject, this is a book almost devoid of detailed explanations of quantitative methodologies, but I have been around long enough to realise that the numerophobic are not an excluded minority. More specifically, it would have been useful to explain in detail the advantages of Bayesian forecasting over alternative methodologies, most obviously game theory and maximum liklihood estimation.
So why is this book relevant to operations management? It covers a lot of ground, but one field not crossed is the management of operational risk. The management of operational risk is often based around the identification of scenarios and then the calculation of the scale of the risk and the probablity of occurrence. So the analysis will identify that the risk of bad thing X happening is Y% in the next Z years: so far so inline with Silver’s approach. But Silver’s argument is that this analysis should take account of prior beliefs and should take account of new information, and this is not always the case. The attraction of building complex models built on past data runs the risk of overfitting, where the model is following the random noise in the past data leading to over-belief in its accuracy, with the importance of new data overlooked. Silver makes the claim for thinking about the power-law relationship between liklihood and severity, persuasively arguing that rare but spectacular failures are either ignored or assigned too low a probability because no one has experienced them before (an availability bias). This argument is obviously close to Taleb’s concept of Black Swan events, but the breadth of Silver’s examples and his relentless linking of it to Bayesian statistics will drive this point into the consciousness of any reader who is also involved in managing operational risk, which nowadays is just about every operations manager. Negative Amazon reviews are often from specialists directly involved in the management of risks critcising the lack of equations and models, but in most operations scenrio analysis the process of evaluating risks and assessing new information is not a quantitative exercise undertaken in isolation, it is an exercise involving a few quantitative specialists and many others less quantitatively skilled but with domain specific knowledge that should be incorporated into the forecasts. For the mathematical mavens this book will not tell them too much they do not know already, but for the larger number of managers who have to think about risk this book will communicate several very important lessons.
Business strategists routinely cite several games when discussing the most effective methods to run an organization. Power players in the business world often refer to games like chess, soccer and even poker when deciding upon what strategy to use.
Unfortunately, too much emphasis is placed on the knowns – playing your cards close to your chest, bluffing when appropriate etc. These clichéd adages will not add value to your business operations unless you understand the psychology beneath these references.
Poker Pros and Business Leaders: A Deeper Understanding
World-class poker players and strategic business people have many things in common. They know how to read situations and they both have big match temperament. Winning the war is what they do, even if it means losing a few battles along the way.
An astute poker player is much like an astute business person. Both of them have great mental acuity to understand what is needed in a situation and how they can make the most out of their resources and environment.
Of course, it pays to be humble in victory and gracious in defeat. Nobody likes a braggart in the game of poker or in the game of life. And nobody likes a sore loser, too.
In business and in poker, everybody wins and everybody loses at some point or another. The goal is to smoothen out that whipsaw motion and build a strong uptrend over time.
Fold to Play Another Day
The world’s most skilled poker professionals take it all in their stride, much like the legendary business people of our time – Bill Gates, Steve Jobs and Richard Branson.
Business and poker are predicated on hard data and not on intuition. Professional online poker players dabble in numbers, whether it’s Texas Hold’em, Omaha Hi-Lo, Stud or Razz.
Pro players know how to pick their battles. They are strategic about the games they play and the competition that they go up against. They carefully pick the right variant of the right game and the right betting structure.
Whether it’s pot limit, fixed limit or no limit, be sure that your bank account can service the game’s requirements.
It is no secret that the world’s finest poker players, such as Nate Silver, are experts at probability. They are skilled at adopting a multi-option approach to betting and the associated probabilities.
In much the same way, a typical business person cannot expect his high-tech startup to be as big as Instagram, Twitter or Facebook. That is simply delusional thinking. Poker players aren’t expected to continuously pull an inside straight flush either.
The game of life, like the game of poker, is based on reality. The shrewd player knows how to manipulate odds in his/her favor by molding the situation to expectations.
Nate Silver Poker Tips Free
Defeats Serve as Lessons
Poker players and business professionals should bear in mind that losing is okay. What’s not okay is accepting defeat and not learning from it. Everybody loses a hand every now and then since there are things that are out of our control.
If you are given lemons, learn how to make a lemon juice. If you know you have an edge over your competition, make sure to maximize that edge by fully exploiting it.
It’s okay to sacrifice short-term profits for long-term gains as that is the name of the game. Many business professionals and market leaders make seemingly silly short-term decisions. Why did Amazon founder and CEO Jeff Bezos purchase the Washington Post? We’ll know in the long-term.
Nate Silver Poker Tips 1x2
Perhaps the most important lesson we can take from poker players and business professionals is the following: Don’t throw good money after bad. You must know when to throw in the towel so that you can live to play another day.
Most skilled online poker players and traditional poker players sit out most starting hands. They simply don’t want to chase down pots with weak hands.
It never pays to get baited into a game if you don’t have the goods to deliver. Fold now and live to play another day. In a no-win situation, why waste valuable resources? If you’re dealt a poor hand, suck it up and toss in your cards. Be patient since it can’t rain all the time.
See Also: 7 Poker Skills You Can Use in Real Life
Author: DLM Editor
Life tips and life hacks for happiness and prosperity.